March 28, 2024

Cotton futures finished lower for the week at 91.38 cents per pound but managed to recover some of the week’s losses after the release of Thursday’s Prospective Plantings report.

• May futures closed at 91.38 cents per pound, finishing 83 points lower for the week.
• News in the cotton market was relatively light this week, as traders were anticipating the Prospective Plantings report.
• The first of the major indexes began to roll this week. That, combined with a higher dollar and continued consolidation, accounted for Wednesday’s sharp decline.
• USDA’s Prospective Plantings report came in as a slight surprise, seeing how many analysts expected a number above the 11.0 million acre estimate in February.
• A total of 10.67 million acres of cotton are expected to be planted in the U.S. in 2024.
• Total open interest rose by 4,323 contracts, increasing to a balance of 278,577.
• Certificated stocks continue to build and were last reported at 52,224, increasing 10,468 from the week prior.

Major indexes notched their fifth straight month of gains and recorded a robust rally for the year’s first quarter.

• The U.S. Dollar had another strong week, finding support from weakness in other currencies.
• March U.S. Consumer Confidence was 104.7, essentially unchanged from February’s number.
• Cocoa futures surged above $10,000 per metric ton this week, rallying on the fourth year of shorter supply and varying financial factors.

U.S. export sales and shipments were on par with expectations for the week ending March 21.

• A net total of 98,200 Upland bales were booked, and 360,700 bales were shipped during the reporting period.
• New crop sales of 72,200 bales were average for this point of the year, increasing from last week.
• Reported Pima sales were a drastic improvement compared to prior weeks. A net total of 13,500 Pima bales were sold, and 4,500 bales were shipped for the week.

The Week Ahead

• The market has already started rolling positions forward, so major funds will continue. Aside from heavier flows, the U.S. Export Sales Report will continue to be the central focus.
• In the week after next, the World Agricultural Supply and Demand Estimates (WASDE) will be released on May 11, and May cotton options will expire on May 12.

The Seam

As of Thursday afternoon, grower offers totaled 40,721 bales. On the G2B platform 302 bales traded during the week with an average price of 89.52 cents/lb. The average loan was 54.56 bringing the average premium received over the loan to 34.96 cents/lb.